New Article Online: Compulsory Promotions for Franchisees and why they work

by Elyse on April 2, 2009

JEM Promotional Products have added another article to our Resources library with the focus on Compulsory Promotions for franchisees and why they work. Here is a sneak preview:

At JEM Promotional Products we work with many franchises not only on their core merchandise range but also on their in-store promotions. Franchises are in a unique situation when it comes to planning their marketing campaigns; although each franchise has a different owner they are all using the intellectual property of the Franchise owner and therefore the Franchise owner must grant permission for the franchisee to use their brand name in any marketing.

Many franchises work where the franchisee pays a marketing and advertising levy which is normally a regular flat or percentage-based fee paid into a centralised advertising or marketing fund (Franchising Magazine, March/April 2009 Vol.22/NO.2). It is up to head office to determine how best to spend this money so that each franchisee benefits equally.

One of the most difficult decisions is picking which advertising medium will benefit everyone equally; putting a newspaper advertisement in a local paper in Queensland will not help a franchisee in Western Australia. Many franchises opt to use the money for an in-store promotion where the customer gets a free gift with purchase as this is a fair way of spending the marketing funds. Many franchises have what they call a Compulsory Promotion which is separate from the marketing and advertising levy.

We define a Compulsory Promotion as a promotion that the franchisee must participate in by purchasing the minimum number of promotional products required however the franchisee is not limited to the maximum number they can purchase. No franchisee is exempt from participating in the promotion without a valid reason.

A good example is a Free Gift with Purchase Promotion. Head Office may determine the promotion, franchisees pay a certain amount to be involved and this amount can be part of or on top of their marketing and advertising levy.

The article continues on our website with:

  • Why Compulsory Promotions work
  • Tips to improve your Compulsory Promotions

Follow this link to read the full Compulsory Promotions for Franchisees and why they work article online.

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